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Democrat on Democrat: Warren spars with Manchin on student loan proposal

Liberal firebrand Sen. Elizabeth WarrenElizabeth WarrenOn The Money: Biden .5T budget proposes major hike in social programs | GOP bashes border, policing provisions Overnight Defense: Biden proposes 3B defense budget | Criticism comes in from left and right | Pentagon moves toward new screening for extremists POW/MIA flag moved back atop White House MORE (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.

The clash, which is highly unusual among party colleagues in the upper chamber, came at a private caucus meeting about a subject that is helping Republicans land blows against their Democratic opponents.

“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.’”

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Warren was referring to a deal Sen. Joe ManchinJoe ManchinNixed Interior nominee appointed to different department role  Against mounting odds, Biden seeks GOP support for infrastructure plan Democrats face mounting hurdles to agenda MORE (D-W.Va.) and two other members of the caucus, Sens. Tom CarperThomas (Tom) Richard CarperFive reasons why US faces chronic crisis at border Appeals court agrees to pause lawsuit over Trump-era emissions rule Five things to watch on Biden infrastructure plan MORE (D-Del.) and Angus KingAngus KingBipartisan lawmakers signal support for Biden cybersecurity picks Groups petition EPA to remove ethane and methane from list of compounds exempt from emissions limits Lack of cyber funds in Biden infrastructure plan raises eyebrows MORE (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes. 

Sen. Tom HarkinThomas (Tom) Richard HarkinWe need a voting rights workaround Romney's TRUST Act is a Trojan Horse to cut seniors' benefits Two more parting shots from Trump aimed squarely at disabled workers MORE (D-Iowa), the chairman of the Health, Education, Labor and Pensions Committee, stood up to announce to colleagues that a fact card passed out by Manchin summarizing his proposal contained two mistakes.

Harkin disputed Manchin’s claim that, under the bipartisan proposal, the interest rates for new Stafford loans would be 3.66 percent. Harkin said that claim failed to reflect that under the Manchin proposal, the rates on undergraduate Stafford loans would hit 7.1 percent by 2019.

Under the law that expired on July 1, the rate for subsidized Stafford loans was 3.4 percent. It has jumped to 6.8 percent and will remain at that level until Congress acts.

Harkin also hit Manchin for claiming the bipartisan plan places a cap on interest rates.

The bipartisan proposal in the Senate would cap student loan rates at 8.25 percent, but only for consolidated loans, not individual ones.

Manchin and his allies, Carper and King, pushed back against the pressure. They took the rare step of holding a competing press conference with reporters in the Ohio Clock corridor while Senate Majority Leader Harry ReidHarry Mason ReidWhite House races clock to beat GOP attacks Harry Reid reacts to Boehner book excerpt: 'We didn't mince words' The Memo: Biden seeks a secret weapon — GOP voters MORE (D-Nev.) touted a separate Democratic proposal to reporters. That plan, sponsored by Sen. Jack ReedJack ReedOvernight Defense: Biden nominating first female Army secretary | Israel gets tough on Iran amid nuclear talks | Army's top enlisted soldier 'very proud' of officer pepper sprayed by police On The Money: CDC extends coronavirus eviction ban through June 30 | Biden to detail infrastructure proposal Wednesday | US won't quickly lift Trump tariffs on China Senate panel ties on embattled Pentagon nominee MORE (D-R.I.), would freeze the rate for subsidized Stafford loans at 3.4 percent for another year.

The bipartisan plan endorsed by Manchin and the others would set interest rates for undergraduate Stafford loans at the 10-year Treasury rate plus 1.85 percent. It would set the rates for unsubsidized graduate Stafford loans at the 10-year Treasury rate plus 3.4 percent.

It would reduce the deficit by $1 billion over 10 years, which Warren and other liberals have characterized as balancing the budget on the backs of students.

The rival messages appeared to exasperate Sen. Charles SchumerChuck SchumerTop academics slam Puerto Rico Self-Determination Act NY Times beclowns itself by normalizing court-packing 'to balance the conservative majority' The first Southern state legalizes marijuana — what it means nationally MORE (N.Y.), the Senate Democratic messaging chief, who engaged in an animated conversation with Manchin, Carper and King before they met with reporters.

Reid tersely described Tuesday’s caucus meeting as “lively.”

While Manchin, Carper and King stood only a few yards down the ornate corridor outside the Senate chamber, Reid drew a line, declaring he would only back a plan that guarantees student loan rates will remain below the current 6.8-percent rate.

“I’ve told my caucus, I’ve told individual senators, if you can explain to me why doing something is better than doing nothing, then we’ll do it,” he said. “All the proposals, within two years, at the outside three years, make the rate more than 6.8 percent.”

Backers of tying the loan rates to Treasury bonds point out that it would result in lower rates now, but Reid said that interest rates are just now beginning to rise from all-time lows, with nowhere to go but up.

“We have the lowest interest rates we’ve had in the history of this country,” he said. “Interest rates are going to go up, and who’s going to suffer from that? Students.”

 After speaking to reporters, Reid planned to meet with Education Secretary Arne DuncanArne Starkey DuncanProviding the transparency parents deserve Everyone's talking about a national tutoring corps; here's what we need to know to do it well More than 200 Obama officials sign letter supporting Biden's stimulus plan MORE and White House chief of staff Denis McDonoughDenis Richard McDonoughCongress must address the toxic exposure our veterans have endured Veterans shouldn't have to wait for quality care The Hill's Morning Report - Presented by the National Shooting Sports Foundation - CDC news on gatherings a step toward normality MORE to further discuss the matter.

Manchin and Carper said they hoped their proposal would receive a vote on the Senate floor, but Harkin said that would not happen Wednesday.

“Why should there be a side-by-side?” he said.

Harkin said Manchin could offer his plan as an amendment if the Senate votes to proceed on the Democratic alternative freezing the rate for subsidized Stafford loans at 3.4 percent for one year.  

The Senate will vote Wednesday to end debate on the motion to proceed to that measure.

Proponents of a one-year freeze of the lower, 3.4 percent rate argued ahead of the floor vote that Congress should tackle the rate as part of comprehensive reforms to higher education, coming as part of the reauthorization of the Higher Education Act.

“It will give us time to look at student lending in a comprehensive way,” said Reed.

There were indications Tuesday that Democrats were looking for some sort of compromise, and some may be enticed to join the market-based approach pushed by Manchin and others. Sen. Claire McCaskillClaire Conner McCaskillThe Hill's Morning Report - Biden tasks Harris on border; news conference today Missouri Senate candidate Eric Greitens tangles with Hugh Hewitt in testy interview The Hill's Morning Report - Presented by the National Shooting Sports Foundation - CDC news on gatherings a step toward normality MORE (D-Mo.), said she could back student loan interest rates based on market movements as long as there are sufficient caps on the rates.

“We might find a sweet spot if we could do a little bit of market, a little bit of caps, and see if we can’t put together a bipartisan group on that,” she said.

And Sen. Bob CaseyRobert (Bob) Patrick CaseyDemocrats divided on gun control strategy Senate Democrats call on DHS for details on response to Portland protests Dems' momentum hits quagmire over infrastructure plans MORE Jr. (D-Pa.), who is a co-sponsor on Reed’s one-year freeze bill, said he was very interested in finding a longer-term solution.

“I’m willing to listen to anything,” he said. “I think it’s vital we start trying to move forward on a longer-term plan.”

Despite the efforts of Manchin and King, it was clear that some liberal lawmakers would not be swayed.

Sen. Bernie SandersBernie SandersAmazon workers have spoken — are progressives listening? What's really behind Joe Biden's far-left swing? It's time to declare a national climate emergency MORE (I-Vt.), a strong proponent of freezing the lower rates, called the bipartisan bill “totally insane.”

“The American people would laugh at that. It’s not a proposal,” he told The Hill, adding that the administration’s push for a market-based student loan rate is also a nonstarter.

“We should make sure working families in this nation can afford college,” he said. “The White House’s proposal is absurd as well.”

Meanwhile, Senate Republicans looked to keep up pressure on Democrats, again highlighting that the White House has also called for student loan rates tied to Treasury bonds.

Sen. Lamar AlexanderLamar AlexanderSenate GOP faces retirement brain drain The Hill's Morning Report - Presented by the National Shooting Sports Foundation - CDC news on gatherings a step toward normality Blunt's retirement deals blow to McConnell inner circle MORE (R-Tenn.), who is a co-sponsor of the compromise bill, said a one-year freeze would leave students “twisting in the wind,” and make student loans a regular political football like the so-called “doc fix.”

— Published at 4:56 p.m. and updated at 8:23 p.m.